Blue Hamster Manufacturing Inc. Balance Sheet for Year Ending December 31 (Millions of Dollars) Year 2...

   

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Blue Hamster Manufacturing Inc. Balance Sheet for Year Ending December 31 (Millions of Dollars) Year 2 Year 1 Year 2 Assets Current assets: Cash and equivalents Accounts receivable Inventories Total current assets Net fixed assets: Net plant and equipment Total assets 1,688 4,950 $11,250 $25,000 $3,690 1,350 3,960 $9,000 $11,000 $20,000 Liabilities and equity Current liabilities: Accounts payable Accruals Notes payable Total current liabilities Long-term debt Total debt Common equity: Common stock Retained earnings Total common equity Total liabilities and equity 50 234 1,328 4,688 $6,250 12,188 $18,750 $25,000 Year 1 50 0 1.250 $1,250 3,750 $5,000 9,750 5,250 $15,000 $20,000 Given the information in the preceding balance sheet-and assuming that Blue Hamster Manufacturing Inc. has 50 million shares c outstanding-read each of the following statements, then identify the selection that best interprets the information conveyed by the Statement #1: Blue Hamster's net collection of inventory items increased by more than the firm's sales between Years 1 and This statement is TED d because: The accruals balance decreased by $234 million between Years 1 and 2 Total inventories of raw materials, work-in-process, and final goods increased from $3,960 million to $4,950 million between Year 1 and Year 2 Total inventories of raw materials, work-in-process, and final goods decreased by $990 million between Year 1 and Year 2 Statement #2: Over the past two years, Blue Hamster Manufacturing Inc. has relied more on the use of short-term debt than on long- term debt financing. This statement is , because: Blue Hamster's total notes payable increased by $78 million, while its common stock account increased by $2,438 million Blue Hamster's total current liabilities decreased by $312 million, while its long-term debt account decreased by $938 milion Blue Hamster's total current liabilities increased by $312 million, while its use of long-term debt increased by $938 million Statement #3: The book value per share of Blue Hamster's stock in Year 2 was $375.00. LIMITED s and Statement #3: The book value per share of Blue Hamster's stock in Year 2 was $375.00. This statement is , because: The per-share book value is calculated by dividing the company's total debt by the number of outstanding shares of common stock The per-share book value is calculated by dividing the company's total assets by the number of outstanding shares of common stock The per-share book value is calculated by dividing the company's total common equity by the number of outstanding shares of common stock Based on your understanding of the different items reported in the balance sheet and the information they provide, which statement regarding e Hamster Manufacturing Inc.'s balance sheet is consistent with U.S. Generally Accepted Accounting Principles (GAAP)? The company's assets should be listed from those carrying the largest balance to those with the smallest balance. The company's assets should be listed in alphabetical order The company's assets should be listed in the order in which they are to be converted into cash. Grade it Now Save & Continue Continue without saving Blue Hamster Manufacturing Inc. Balance Sheet for Year Ending December 31 (Millions of Dollars) Year 2 Year 1 Year 2 Assets Current assets: Cash and equivalents Accounts receivable Inventories Total current assets Net fixed assets: Net plant and equipment Total assets 1,688 4,950 $11,250 $25,000 $3,690 1,350 3,960 $9,000 $11,000 $20,000 Liabilities and equity Current liabilities: Accounts payable Accruals Notes payable Total current liabilities Long-term debt Total debt Common equity: Common stock Retained earnings Total common equity Total liabilities and equity 50 234 1,328 4,688 $6,250 12,188 $18,750 $25,000 Year 1 50 0 1.250 $1,250 3,750 $5,000 9,750 5,250 $15,000 $20,000 Given the information in the preceding balance sheet-and assuming that Blue Hamster Manufacturing Inc. has 50 million shares c outstanding-read each of the following statements, then identify the selection that best interprets the information conveyed by the Statement #1: Blue Hamster's net collection of inventory items increased by more than the firm's sales between Years 1 and This statement is TED d because: The accruals balance decreased by $234 million between Years 1 and 2 Total inventories of raw materials, work-in-process, and final goods increased from $3,960 million to $4,950 million between Year 1 and Year 2 Total inventories of raw materials, work-in-process, and final goods decreased by $990 million between Year 1 and Year 2 Statement #2: Over the past two years, Blue Hamster Manufacturing Inc. has relied more on the use of short-term debt than on long- term debt financing. This statement is , because: Blue Hamster's total notes payable increased by $78 million, while its common stock account increased by $2,438 million Blue Hamster's total current liabilities decreased by $312 million, while its long-term debt account decreased by $938 milion Blue Hamster's total current liabilities increased by $312 million, while its use of long-term debt increased by $938 million Statement #3: The book value per share of Blue Hamster's stock in Year 2 was $375.00. LIMITED s and Statement #3: The book value per share of Blue Hamster's stock in Year 2 was $375.00. This statement is , because: The per-share book value is calculated by dividing the company's total debt by the number of outstanding shares of common stock The per-share book value is calculated by dividing the company's total assets by the number of outstanding shares of common stock The per-share book value is calculated by dividing the company's total common equity by the number of outstanding shares of common stock Based on your understanding of the different items reported in the balance sheet and the information they provide, which statement regarding e Hamster Manufacturing Inc.'s balance sheet is consistent with U.S. Generally Accepted Accounting Principles (GAAP)? The company's assets should be listed from those carrying the largest balance to those with the smallest balance. The company's assets should be listed in alphabetical order The company's assets should be listed in the order in which they are to be converted into cash. Grade it Now Save & Continue Continue without saving

Answer rating: 100% (QA)

Cash cash equivalents Total current assets account receivables in... View the full answer